360 One WAM, formerly IIFL Wealth Management, has valued Zomato’s rival food delivery platform Swiggy at $11.5 billion as of June 2024. This development comes at a time when the Bengaluru-based firm as it continues to expand its presence in a rapidly evolving industry, as well as gears up for an IPO.
The firm sighted Swiggy’s financial performance during the first half of fiscal year 2024 (H1 FY24) as well as company’s growth trajectory and its potential for profitability, for this valuation. Swiggy recorded revenue of ₹7,474 crore in the first six months of FY24, which translates to an estimated ₹14,947 crore on an annualized basis by the end of March 2024. Swiggy’s IPO, which the company has confidentially filed for, is widely anticipated to be one of the largest tech listings in the country this year. Still, Swiggy is expected to go public at a valuation slightly lower than Zomato’s, with projections ranging between $13 billion and $15 billion.
According to the investor presentation by 360 One WAM, Swiggy is on the cusp of achieving Ebitda (Earnings Before Interest, Taxes, Depreciation, and Amortization) breakeven, which would mark a major milestone in its journey toward profitability. The company’s gross order value (GOV) for H1 FY24 was recorded at ₹17,528 crore, reflecting a 27% year-on-year (YoY) growth.
Swiggy’s food delivery business experienced an 18% YoY increase in order volume, while Instamart posted a remarkable 57% YoY growth. Additionally, Swiggy’s Dineout business, which offers dining experiences and deals at partner restaurants, reported an extraordinary annual growth of 188% as well. Furthermore, in H1 FY24, the company’s monthly cash burn was reduced to ₹181 crore, down from ₹336 crore in FY23. This reduction in expenses, coupled with a strong cash balance of ₹6,000 crore as of September 2023, puts Swiggy in a strong financial position to continue scaling its operations while managing costs more effectively.
360 One WAM, a major investor in Swiggy, has been instrumental in supporting the company’s growth as it prepares for its IPO. Formerly known as IIFL Wealth Management, 360 One WAM has emerged to be a prominent player in the Indian wealth management space, with $3 billion invested across various private equity and venture capital strategies. In 2022, Bain Capital acquired a 25% stake in 360 One WAM, and the wealth firm recently raised $500 million for its debut secondary fund, according to its chief investment officer Sameer Nath. The firm plans to deploy the proceeds from the funds towards companies that are planning to go public within the next two years.
Swiggy’s positioning in the market becomes even more significant when viewed alongside its closest competitor, Zomato. Zomato, which went public earlier, has seen its market capitalization soar, reaching $21.5 billion in June 2024 and further climbing to $28 billion due to rapid growth in its quick commerce business, Blinkit. Instamart, Swiggy’s answer to Zomato’s Blinkit and another rival, Zepto, eventually emerged as a key driver of growth for the company. This comes at a time when quick commerce is proving to be more dynamic than traditional food delivery, with the segment expanding rapidly as consumer demand for faster delivery of a wider range of products continues to grow. Unlike food delivery, where competition is fierce and order growth tends to be more incremental, quick commerce offers significant opportunities for scaling, particularly in metropolitan areas and tier-2 cities where e-commerce adoption is accelerating.
